Nashville Symphony shows signs of new life

After scary 2013, progress made in revenue, fundraising

Jan. 19, 2014

Nashville Symphony officials say that through a series of moves, including new concert formats, they are making progress toward getting back on solid financial ground. / Tom Stanford / File / The Tennessean

After nearly falling off a fiscal cliff in 2013, the Nashville Symphony says it is making progress toward getting back on solid financial ground.

Just last summer the symphony’s home, Schermerhorn Symphony Center, was facing imminent foreclosure until benefactor Martha Ingram stepped in to save the day, taking on a $20 million mortgage for the center and persuading lenders to forgive millions of dollars in debt. The symphony also renegotiated a one-year labor contract with its musicians, who, along with the nonprofit’s executive and office staff, took pay cuts.

But those maneuvers were just the beginning of the story, President and CEO Alan Valentine said. Now, observers are keeping a close eye on the symphony’s operations to see if an ambitious, new fundraising effort and booking strategy will pay long-term dividends.

Five months into its fiscal year, progress has been made, Valentine said. After the symphony more than doubled the number of non-symphony shows and concerts in which it plays contemporary music or accompanies pop artists, its ticket revenue is tracking well ahead of previous years. As of Wednesday, the symphony has seen $6.69 million in ticket sales this fiscal year, just $2 million short of its goal, which would be a record.

While the number of symphony performances has remained about the same, these new concert formats, in which the symphony backs visiting acts such as the band Chicago, are expected to rise from about five to 10 this fiscal year. The Chicago performances in September broke the Schermerhorn’s weekend box office record, spokesman Jonathan Marx said.

Leadership also has made it a priority to book more non-symphony events. In previous years, there were about 10 such shows a year; this year there will be about 25. Among those was noted spirit medium Theresa Caputo, who appeared before a sold-out show in October. The centerpiece of the operation remains the critically acclaimed symphony, though, and those shows have seen memberships rise as well, Valentine said.

“Nobody’s going to buy a ticket to look at our balance sheet onstage,” Valentine said. “We’ve got to deliver a product to the community that the community wants.”

'Right steps are being taken'

The symphony also has amped up its fundraising efforts, with an annual goal of $9.1 million in contributions and grants. To date, about $4 million has been raised, with about seven months left to close the gap. For perspective, the annual fundraising goal had been about $4 million in recent years. Aegis Sciences was one of the corporate sponsors that stepped forward, becoming the lead sponsor for the center’s classical series.

“What I witness as a businessperson is all the right steps are being taken to ensure the financial stability of the organization,” said Aegis President and CEO David Black, who is also a board member for the symphony.

There was certainly room for improvement. Between the 2009 and 2012 fiscal years, expenses exceeded revenue by about $39 million, according to the nonprofit’s annual tax filings.

“Once we reached a place where we had the debt settled and the negotiations were settled, we really did a lot of things to restructure operations,” Valentine said.

Robert Flanagan, economics professor emeritus at Stanford University and author of the book “The Perilous Life of Symphony Orchestras,” said it is critical to compare where the symphony stands in total ticket revenue with past years.

That analysis shows that ticket revenue is up significantly. The highest previous total through Jan. 15 came in 2012, when ticket revenue stood at $5.1 million, compared with $6.89 million so far this fiscal year. Flanagan said the key to a sustainable economic model is an organization that is constantly evolving and looking for new sources of revenue.

“All performing arts organizations face increasing operating deficits over time, even when they are very well managed,” Flanagan said. “Therefore, the key to a sustainable economic model for an orchestra are revenue sources that grow over time. The last three words are crucial — simply replicating activities that achieve financial balance in one year is no guarantee of maintaining financial balance in future years, given the relentless upward pressures on costs.”

Contact music business reporter Nate Rau at 615-259-8904 or nrau@tennessean.com. Follow him on Twitter @tnnaterau.